Sunday, September 29, 2013

Can Solar Be a Differentiator in Deregulated Electricity Markets?

Retail electricity customers of Texas power provider Green Mountain Energy can now choose 100 percent solar-generated electricity for a 1 cent per kilowatt-hour premium.
Texas has become an intensely competitive market since its deregulation in 2002.
For example, entering a ZIP code for a typical Houston suburb into the state’sPower to Choose online marketplace returns 262 plan options including 71 plans that offer 100 percent renewable energy. Plans ranged from a six-month, $0.068 per kilowatt-hour contract with Reach Energy to a one-year, $0.139 per kilowatt-hour, 100 percent renewable energy contract with Entrust Energy.
There were three Green Mountain 100 percent renewables contracts for that ZIP code, one for six months at $0.118 per kilowatt-hour, one at a month-to-month rate of $0.128 per kilowatt-hour, and a one-year, $0.131 per kilowatt-hour contract. With the introduction of its new SolarSPARC program, Green Mountain will find out if a 100 percent solar contract can be a differentiator.
Green Mountain has attracted an estimated half a million customers and sold 14 million megawatt-hours of electricity since Texas deregulated its market in 2002. It is a fully owned subsidiary of NRG Energy, the biggest U.S. independent electricity provider, and the parent of NRG Solar, which has been aggressively acquiring solar assets in the last two years. Among NRG Solar's purchases have been the 372-megawatt BrightSource Energy solar power tower project and the 66-megawatt Alpine Solar photovoltaic project. None of its acquisitions have been in Texas.
A combination of ample open land and excellent insolation give Texas the best solar resource in the U.S., Green Mountain Production Innovation Manager Shay Ohrel said, but its current installed capacity is ranked fifteenthin the country. Some 85 percent of Texas' installed capacity, Ohrel added, is in the CPS Energy territory in San Antonio and the Austin Energy territory, because those two utilities offer “solar-friendly” policies and incentives, according to Ohrel.
“For people who don’t have a solar array on their roof or participate in a community solar program,” said Green Mountain Senior Strategy and Marketing Manager Jason Sears, “this is a chance to have solar-generated electricity without having a roof for it or signing a twenty-year lease or putting in thousands of dollars upfront.”
Green Mountain guarantees at least 4 percent of the Renewable Energy Credits purchased to fulfill the SolarSPARC contract will be from Texas and all will be retired.
The new solar product has three components, according to Ohrel.
  • It is a 100 percent solar offering, the first in Texas
  • Green Mountain will contribute $4 per month per new customer to a fund dedicated to building solar assets in Texas and will fund the first project itself, a 10-kilowatt installation at the Green Mountain Energy Wind Farm in West Texas
  • SolarSPARC customers will get an $11 bill credit, on a recurring annual basis, for each of the first eleven new projects built by the program, a potential $121 annual dividend
“Average usage in Texas is 900 kilowatt-hours to 1,000 kilowatt-hours per month,” Ohrel said. “The bill credit is a small monetary reward, but our customers are driven by environmental impact concerns and we are really giving them the direct connection to getting solar installed in Texas.” If a sizeable portion of the half-million-household Green Mountain customer base elects to buy the SolarSPARC product, that $4 per month contribution to development could make a significant difference to the installed capacity of Texas solar, Ohrel claimed.
As a measure of the possibility, Green Mountain’s customers have made enough $5-per-month voluntary contributions to its Sun Club program since 2002 to build 50 installations for nonprofit organizations, totaling 575 kilowatts. And through the SolarSPARC program, it will be not customers but Green Mountain that will be anteing up.
SunEdison Government Affairs Director Maura Yates said, “This Green Mountain move demonstrates that the Texas retail solar market is approaching a point where solar is a competitive resource absent utility incentives.” 
“We are constantly asking our customers what products they want,” said Green Mountain PR Manager Katie Ryan. “It is going to be fascinating to see if there is an appetite for this.”
Syndicated from GreenTechSolar

Recent News

More News